debt freedom

Utilize Your Debt Relief Option To Achieve Success Inspite Of Debt

June 21, 2013 by editor

Being in debt does not mean it is the end of the world for you. If you react to it correctly, it might be the catalyst that will help you achieve elusive financial success. You may be surprised that there are millionaires and billionaires who once declared themselves bankrupt. They were able to rise from the ashes of their financial ruin and emerge victorious and happily rich at present.

That can be your success story. If you are wondering how to do that, pay attention to what we will discuss in this article.

First of all, you have to accept that there is something wrong with the way you are living your life. If you got yourself in debt, that means you have been living beyond your means. You have to correct that so you no longer incur debt.

Once that acceptance is solidified, you may want to consider the options that you have to achieve debt freedom. If you want to be successful in life, you want to make sure that your option will not harm your chances to improve your personal wealth. Usually, that means you have to take care of your credit score. It will allow you to gain better deals in loans that you can use to improve your income. After all, this is commonly included in the background check that employers makes for applying employees. It can also open up business opportunities that you may want to set up.

Debt consolidation is your best option at this point. It will provide you with a more structured payment scheme that will eventually assist you in paying down what you owe. If you chose debt consolidation loans, your score will slightly dip as your debt amount increases. However, once you have paid off the other loans with that new loan, your score will improve again. In debt management, it is usually not reflected in your credit report.

Another great thing about this debt relief option is it lowers your monthly payments. You can use the freed amount to grow your savings and to invest it in a business venture. As you grow your income, you can make bigger monthly payments and that will help you get out of debt a lot faster.

Since this debt solution will not reduce your debts, you will feel the full impact of your debt payments. If you work hard to get out of debt, it will leave a more lasting impression on you. That hardship will keep you from incurring more debt or landing yourself in another debt situation. This is very important because you have to learn your lesson. Some people who went the easy way out did not feel the full impact of how debt can ruin their lives. They did not mend their ways and soon ended up in debt once more.

As you pay off what you owe, you need to identify the lessons that you have to learn to keep away from another debt situation. These involve saving, budgeting, smart spending and the overall living within your means state of mind. This is what will fuel the success that you wish to achieve in your life.

Use Debt Management To Deal With Debt Stress And Achieve Debt Freedom

May 25, 2013 by editor

Debt brings into our lives a lot of stress. It is such a difficult and restrictive situation to be in that those in debt want nothing more than debt freedom. Although you are working as hard as you can, you are not allowed to enjoy that money because you have so many credit obligations to deal with. So here’s what you can do to help with debt stress and achieve debt freedom: debt management.

As one of the many ways to consolidate debt, debt management involves a debt counselor who will help make your debt and finances more organized. If you choose this solution, you will find that the stress you used to feel will be minimized. The counselor will take over any communication with your creditors. They will also help you come up with a plan that best suits your financial capabilities. You don’t have to worry about your money and how you can afford to pay off all that you need to finance. You can pay off your basic necessities and still take care of your payments.

The debt counselor will help you come up with a debt management plan that will distribute your debt balance over a long payment period – at least, it will be longer than the current. This will allow you to make lower monthly contributions. The counselor will present this to your creditors to convince them to allow you to use this plan for your debt payments. When they agree, you can send the total monthly payment for all your creditors to the counselor. They will be in charge of distributing the funds to all the creditors that you enrolled in the debt management program. That makes it very convenient for you.

Since you don’t have to communicate with your creditors, you will feel the debt stress going down. Not only that, the ease that the debt counselor helps you attain will allow you to concentrate on growing your income. The process makes it easier for the consumer to complete the program – thus making debt freedom more guaranteed.

Despite the obvious benefits of this debt solution, you still need to do develop a couple of habits that will teach you proper financial management. This will help you stay debt free. Here are a couple of habits that you need to learn.

Budgeting. This involves a plan that will indicate your income and expenses. Be as detailed as possible especially with your expenses because it will help you determine if you are overspending or not. If you are, you can adjust your expenses accordingly or you can earn more to accommodate all your expenses.

Saving. This is an important habit that will support your debt freedom. If you have adequate reserve fund, you can support yourself and your debt payments even when certain situations compromise your main source of income. Also, any emergency expense can be funded without a problem. You don’t have to borrow money anymore.

Earning through a supplemental income. One of the great things about having more than one source of income is financial stability. Even when your main income is gone, you still have some money coming in. It may not be as big as before, but if you combine that with your savings, you should be alright.

Are Debit Cards Really Helpful To Maintain Debt Freedom?

May 22, 2013 by editor

Credit cards are getting so much negative feedback because of the fact that so many consumers are suffering from the debts that have accumulated because of it. The whole concept of this card is to allow consumers to purchase items that they cannot afford at present. They are allowed to pay for it using a future income that has the possibility of not arriving. If it is compromised, the consumer is left with a high interest debt that can end up ruining their financial stability.

This is why debit cards are starting to be a popular alternative for cashless purchases. Some people think that by eliminating credit cards, they are saving themselves from potential debt.

While this may be true, it is only right that you find out what you can about debit cards before really using them.

The benefit of debit cards is the fact that it allows you to purchase items without carrying cash. This is much more safe. When you lose your cash, it is gone for good. If you lose your debit card, you can simply inform the card company so they can freeze the account so it will not be used by the person who got hold of it.

The safety is also for the debt that you will not acquire. Unlike credit cards that rely on future income for payment, you have to deposit money into your debit card before you can use it. When it runs out, you don’t have to worry about overspending. You cannot spend more than what you have deposited into your account. It supports the practice of living within your means.

Most retail stores also give reward points for the use of these cards. These points can be exchanged for products and freebies. Sometimes, it can be used to purchase more products. Some of the popular stores have their own debit cards that you can use and stock up points.

However, all of the benefits do not really answer the question of debt freedom. Will it help maintain a debt free life?

First of all, you need to get out of debt first. If your credit card got you into debt, you have to pay it off to achieve debt freedom. You have several options but if you wish to maintain a good credit score as you pay off what you owe, you may want to use debt consolidation. Once you have paid it off, make the decision to cancel your credit cards. You can choose to have only one credit card or to get rid of them all and use only debit cards from now on. A combination may be good for you too.

Once you are debt free, maintaining them is easier if you have debit cards. Since these cards will not let you overspend, you don’t have to worry about going over budget. You just have to make sure that you put in the right amount into your card.

One piece of warning, make sure you understand the fees involved in debit cards. There are certain fees that you have to pay for when you make any transaction. You need to understand the fine prints before you sign up to anything. Not only that, make sure the account where you will put your debit card money is FDIC insured – just in case.

Make Debt Freedom Last Through Debt Consolidation

May 13, 2013 by editor

Debt freedom eludes some people because they fail to implement important habits while they are going through the program. This is especially true for those who have chosen debt consolidation.

Among the other types of debt relief, this has a high percentage of people who are unable to achieve debt freedom. It can be because they were unable to complete the program or it can be caused by backsliding into more debt. While the completion rate is low, it is unfair to assume that the whole program is flawed. It is an effective way to achieve debt freedom but the thing is, you have to know the right habits to implement and the pitfalls to avoid.

Unlike debt settlement or bankruptcy, debt consolidation requires the consumer to have a steady income to support their debt payments. This method of paying off debts will only combine your different debt accounts so that paying off what you owe will be more manageable. Although a lower monthly contribution is oftentimes enjoyed, it will not reduce the total amount of debt. You will still end up paying the whole amount that you owe your creditors. The lowered payments becomes possible because the balance is distributed over a term that is longer than your current.

The low monthly payment, longer term and the lack of debt reduction makes for a slow going debt payment. This makes for a scenario that can easily bring discouragement to the debtor. If you want to avoid this, you have to create a payment plan that provides encouragement through pre-determined milestones. These will mark small successes for you and should be partnered with a reward that will help motivate you.

Once you have dealt with the possibility of discouragement, there is another issue that you have to work on – putting yourself further in debt.

Although effective in paying off your creditors, debt consolidation has a high chance of putting someone further in debt. The single payment method is sometimes perceived as a false sense of solution. The ease is a double edged sword. You end up feeling like your debts were not as bad as you thought it was and that may give you the false excuse that you can borrow some more. For instance, when you use debt consolidation loans to pay off your credit card debts, all your cards will be back to zero balance. That makes it very tempting to use. Remember that you haven’t really paid off your debts. You just shifted it so that it becomes easier to manage so you can concentrate more on growing your income for your debt payments.

Debt relief takes some form of adjustment. If you got yourself in debt. That means something was wrong with your old lifestyle. Make sure you implement the right adjustments by practicing the right financial management skills. Also, give yourself some allowance during the first 30 days. A drastic change may take its toll on you. If you think that cutting back on your usual expenses is needed, go at it slowly. It’s similar to how crash diets don’t always work. Make the changes but also ensure that you can commit to them. That is how you make debt freedom last in your life.